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Country Overview: VanuatuCountry Overview: Vanuatu
ITU – PITA Workshop on Enhancing Access to Submarine Cables in the Pacific SUVA FIJI 2017
The Governmentof The Republicof Vanuatu
Overview of Presentation
Brief on:
Vanuatu and its status on economic development
Telecommunications Market Overview
Telecom Services Subscriber Numbers
Market Trend
Activities contributed to increase connectivity
Current status on International Internet Capacity supplied
Structure of wholesale Market
Wholesale Internet Capacity Market Activities
Policy/Regulatory Instruments Relating to International Connectivity
Challenges
TRR’s Regulatory Approach
Vanuatu – Geopolitical Overview
Archipelago consisting of 83 islands of which 63 are inhabited
Population of approximately 272,459 (2017 mini census) with the annual growth rate of 2.3% Around 40% of the population is under 15 75% of the population live in rural areas
GDP (2015) of VUV83,594 million ($767.4 billion) Largest contributor to GDP is Tourism
Agriculture follows close behind GNI (per capita (2014)) $US 3,148
5% of monthly income is around $US 13 Cheapest unlimited internet service is $US 58 per
month (512 kbps advertised speeds) ~$US 9.70 for a 1GB monthly allowance of data
Political system Single chamber, multiparty, democratic republic
Challenges Political stability, economic recession, natural disasters
(cyclones, earthquakes, tsunamis, climate change)
Independent Regulator - TRR.
Established under the Telecommunications and Radiocommunication Regulation Act No.30 of 2009
Two full service carriers (Telecom Vanuatu, Digicel)
TVL dominant in fixed line and ISP
Digicel dominant in mobile
A further 4 ISP players
Telsat, Wantok (fixed 4G), Global Pacific Telecom and SPIM
Cover Port Vila only at this point in time
Kacific Broadband Satellite company providing broadband internet across the archipelago
Single Submarine Cable – Interchange Cable Limited
Connects Fiji – Vanuatu
Commenced operations March 2014
Financed through combination of local investment and commercial bank financing
Cost around $US 32 million
Market Overview
Subscriber Numbers
0
50,000
100,000
150,000
200,000
2014 2015 2016
Mobilesubscriptions
Mobile datasubscriptions(Est.)
0
1,000
2,000
3,000
4,000
5,000
6,000
2014 2015 2016
Fixed internetsubscriptions
Fixed-line telephonesubscriptions
Market Trends
Mobile penetration rate continues to grow, from 53% in 2014 to 71% in 2016
Analysis suggests around 98% of the population will have mobile coverage by 1 January 2018
Mobile data usage has grown dramatically in the last 2 years
Fixed line telephony continues to decline slowly
Fixed internet subscriptions are growing gradually year-on-year.
Use of SMS has declined significantly as users switch to using OTT services such as Messenger, Facebook and WhatsApp.
Mobile data bundles now typically have unit costs of around 1 US cent per MB.
Access to stream services such as Netflix is leading to greater demand and improving in Quality of experience particularly in urban areas
Activities contributing to increase connectivity
Increase/Improve mobile and internet coverage to underserved and unserved areas
Combination of operator commercial activities and Government’s Universal Access Policy (UAP) funded projects
Operator Activities
Pay or Play approach under UAP
Involves signed undertakings to rollout infrastructure in un/underserved areas
UAP Funds Project Initial focus on education - delivery of school/community internet labs Assist in implementing school and student administration/management
applications (OPENVemis) Investigate opportunities in health, agriculture extension other GOV services
to be delivered as e Gov services
Without Prejudice
International Internet Capacity Supplied and Wholesale Unit Pricing
Wholesale Market Structure
Submarine Cable Provider Interchange Ltd (ICL)
Government of Vanuatu (limited to
GoV users only)
Fidelity Communications
Corp. (FCC)
Speedcast
Telsat
TVL Digicel Wantok
Wholesale Internet Capacity Market Activities
All retail service providers are connected to the submarine cable
Most of these providers currently purchase capacity, on a lease basis, from wholesaler Fidelity Communications Corp.
Since the launching of the submarine cable weighted average lease pricing in the market has been US 340 / Mbps / month
A number of recent developments has resulted in current average market lease pricing of around $US 260/Mbps/month
Indefeasible Right of Use (IRU) capacity is available, for 15 years, from Interchange, current filed pricing is:
$US 5.4 million for STM-1 (155 Mbps)
$US 9.3 million for STM-4 (622 Mbps)
$US 27.9 million for STM-16 (2488 Mbps)
Policy/Regulatory Instruments Relating to International Connectivity
Telecommunications and Radiocommunications Act, 2009
Telecommunications Licence Terms and Conditions
Exception Licence (whole sale operators) Terms and Conditions
Vanuatu National ICT policy promotes:
deployment of submarine cable
Options to enhance reliable international connectivity
Development of Exchange Points
Framework and strategy for the availability of and access to wholesale services
There is no specific national Policy related to International Connectivity
Challenges
Small Market size thus led to and contributed to a number of challenges faced such as:
High cost of project and constructing a private submarine cable
Market Structure at the Wholesale level
Financing arrangements made to recover the investment
Retail service providers appear to have so far been reluctant to make large or long term commitments to invest in cable capacity
No specific Regulatory tool to guide both the operations and the monitoring of the operations of this vital service infrastructure
Changes in Government and management of other individual shareholders/ representatives in submarine cable company may have reduced the clarity of the operating environment
Limited Knowledge capacity or understanding on the important aspects (technical, commercial, legal, economical) of operating a vital infrastructure & business operations
Limited cooperative efforts and approaches by key stakeholders
With the above few list of challenges, it is difficult to strike a balance between stimulating a greater demand and making returns
TRR’s Regulatory Approach
To establish a workable regulatory framework and environment that is fair, transparent and importantly promotes sustainable investment in the country: TRR’s approach is to collaborate with all key stakeholders to ensure open,
non-discriminatory, access to submarine cable capacity on fair, reasonable and cost-based terms
As such, TRR has undertaken numerous rounds of consultation on matters relating to the wholesale internet capacity market including in relation to pricing and conduct in this market
As an outcome of the above consultations, TRR established an approach that is fair for all players (which is to seek approval for the pricing and other terms for any proposed sale of capacity). This approach is applied to all wholesale players.
For operators who do not enforce their Licence obligation and continues to repeatedly fail on their part, TRR ordered them to comply.
Promoting collaboration but independent decisions, TRR has recently sought to work with ICL to undertake an analysis of its costs in order to facilitate the legal approach on TRR approval of pricing
Tankyu Tumas